Economy Argentina wants to legalize billions of dollars in black money

The ultra-liberal government of Argentina's President Javier Milei wants to legalize billions of US dollars in illicit money. Government spokesman Manuel Adorni announced that capital controls in the South American country are to be significantly relaxed by means of a decree and a draft law. The aim is to encourage savers to bring their reserves in cash or abroad back into the official economic cycle. "We need more liquidity for the economy. If we achieve this, growth will be sustainable," said Minister of Economy Luis Caputo.

Keystone-SDA

22.05.2025, 19:45

SDA

Accordingly, a whole series of information obligations to the tax authorities, for example regarding bank transfers, cash withdrawals and property and car sales, will be abolished. "Argentines will once again be considered innocent until the tax authorities prove otherwise. Your dollars, your choice," said Adorni.

In Argentina, a considerable part of the economy bypasses the tax authorities. In addition, until recently, private individuals were prohibited from acquiring large amounts of dollars, which is why most of the cash reserves in dollars were exchanged on the black market.

Nowhere else outside the USA are there so many dollars

According to estimates, Argentinians have between 250 and 400 billion US dollars in cash or abroad. Due to the high inflation in the national currency, the peso, and the mistrust of the banks, Argentines have invested their savings primarily in dollars in recent decades. No other country in the world outside the USA has as many dollar notes in circulation as Argentina.

Now the government wants savers to spend their dollars in order to boost the ailing economy. "If these funds are pumped into the economy, it will lead to an enormous acceleration in the growth rate," said President Milei in a recent television interview. "It's like legalizing black money, but without paying taxes. It's not about collecting taxes, it's about making funds available. So that people can freely dispose of their money."